Do Opt-In Lists Really Perform Better Than Opt-Out?

This is one of those questions that most email marketing experts agree on – but we’ve little recent data to prove the point. My theory is that it’s such “conventional wisdom” that people have stopped testing it – the same way they don’t do any more studies to see if smoking causes cancer. Those in the know are in agreement.

But it was still exciting to be able to analyze data from one of my clients, a large household-name organization where some business units are using opt-in to build their email lists and others are relying on lists that have been purchased from a third party, making them opt-out.

This organization relies on a single third-party organization for their list purchases. It’s a legitimate list broker that is well-respected in its industry and provides business, not consumer, email addresses to my client – along with demographic and other information to allow for segmentation and targeting. This isn’t some fly-by-night, $300 for 1 million email addresses operation.

For this analysis, I looked at email metrics from the beginning of 2010 through Q3 2011. I narrowed the field to eight business units that are strictly opt-in and seven that are strictly opt-out. All together they had over 330 million email messages that were assumed delivered (did not bounce) in this period; 137 million were sent from the opt-in business units, with nearly 195 million being sent from the opt-out business units.

So how do you think the opt-out lists performed compared to the opt-in lists?

Open rates for the opt-in business units were, on average, 82 percent higher than the open rates garnered by the opt-out business units. To put that in perspective, let’s look at Q3 2011. Here the opt-in business units had 14.9 percent of their email messages opened, compared to just 8.5 percent of those sent by the opt-out business units.

Over the course of these seven quarters, recipients opened over 21 million messages from the opt-in units; fewer than 17 million of the opt-out business units’ messages were opened, even though they sent nearly 60 million more emails.

The variance in click-through rates was even greater; on average the opt-in business units saw more than double the click-through rate garnered by the opt-out business units. For Q3 2011, that was the difference between an average click-through rate of 3.1 percent for the opt-in business units versus 1.7 percent for those that didn’t have prior affirmative consent to send email messages.

Over the period studied, the opt-in business units received nearly 1.5 million more unique clicks and nearly 2.5 million more total clicks than the opt-out business units. Even though the opt-out business units sent 43 percent more email messages.

The last metric I analyzed was click-to-open rate. Here the results were surprising. While the opt-in business units clearly bested the opt-out units on opens and clicks, the 2011 click-to-open rate variance was much smaller.

The opt-in lists still performed better in Q3 2011, but only by 6 percent. The average variance over the entire period was 17 percent. In 2010, the variance was much higher, ranging from 12 percent to 41 percent by quarter.

So what does this mean? Based on this analysis, people that have actively opted in to receive email open and click-through at much higher rates than people that have been added to a list without their knowledge.

But the trend in 2011 is showing that the percentage of those who click on an email once they have opened it is very similar. So the opt-in is getting more people to open the email, but it’s not getting a significantly higher percentage of that group to then click on it.

The data that wasn’t included in this analysis is the most important: conversion rate and revenue generated. As with many large organizations, that information lives outside the email reporting platform and it’s difficult to identify and tag revenue generated directly from an email message. It shouldn’t be, because the technological capability is there, but it is.

Still, let me leave you with one thought: if you’re looking to build a successful email campaign that maximizes the raw number of people that open and/or click on your email messages, then this analysis suggests that opt-in is indeed the way to go.